May 12, 2022 12:54 GMT
FI firmer post data, top end of overnight range as long end adds to midweek rally as weekly claims come out higher than est at 203k vs. 193k, PPI largely in-line +0.5% MoM, +11.0% YoY.
- Curves extend bull flattening -- are moving off lows after 2s10s fell to 22.474 low from over 42.0 on Monday, 26.859 last (-0.880). The 5s30s spd still holding above inversion around 3.260 after falling to 0.397 earlier.
- Short end recovering from Wed's sell-off where additional 50bp hikes priced in after hot Apr CPI +0.3% MoM/+8.3% YoY -- faster pace than the 8.1% analysts exp while Core CPI jumped 0.6% MoM, 6.2% YoY, rekindled 75bp hike debate.
- US 10Y technicals: Despite the bounce off Mon's lows a primary downtrend remains intact w/ corrective (bullish) cycle established, suggesting potential for additional gains near-term.
- TYM2 contract at 119-28 trades above 20-day EMA (119-10+) opens key resistance of 120-18+ (Apr 27 high). This level represents an important short-term resistance where a break would signal scope for a stronger retracement. Meanwhile, key support and the bear trigger is at 117-08+.
- Cross-assets: WTI Crude Oil (front-month) down -1.25 at $104.48 on soft global demand; Gold down 6.42 at $1845.98.